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Business services provider Quess Corp. reported a significant decline in net profits, which plummeted by 61 per cent YoY to ₹30 crore, compared with ₹77 crore in the corresponding quarter of the previous year.
The net revenues were up by 17.1 per cent to ₹4,440 crore.
Cash burn
Its EBITDA for Q4 stood at ₹586 crore, down 6 per cent YoY. Speaking about the stressed PAT and EBITA margins, Guruprasad Srinivasan, ED & Group CEO, said that the investment of almost ₹100 crore in its product-led business, in which it has acquired Monster.com, which was renamed Foundit, has been heavy on cash burn.
“While we spent about ₹95 crore last year in terms of investment, our sales growth from the platform has been about 36 per cent, and our revenue growth has been up by 29 per cent YoY. In FY24, we expect to bring down the cash burn on this particular platform by half,” he added.
For the complete year, the net revenue was up by 25 per cent to ₹17,158 crore, which was driven by work force management (WFM) up 25 per cent, operating asset management (OAM) up 24 per cent, global tech solutions (GTS) up 23 per cent and product-led business (PLB) up 59 per cent, the company said. PAT for FY23 was down by 11 per cent to ₹223 crore compared with ₹251 crore in FY22.
Headcount
Quess’ headcount saw a net addition of 74,000 (17 per cent YoY growth) in FY23, with tailwinds in sectors including manufacturing, banking, the financial insurance segment (BFSI), retail, telecom, and some consumer durables as well. In the IT sector, the demand largely comes from auto engineering, digital, and 5G technology.
As to the impact of the slowdown in the IT sector, the CEO said that they expect hiring to come back by the second half of this year and estimate the demand to bring the margin back to about 3 per cent.
While the company doesn’t give a forward-looking guideline, the CEO said, “If we were to look at our trajectory, we have been able to grow about 25 per cent on an annualised basis. So if I were to extrapolate on that by size, we still grow anywhere between 3 and 4 per cent quarter on quarter easily.”
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